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November 4, 2011

Time to Embrace China and ‘Unthinkable,’ Says Ramo at Schwab Impact

The U.S. government and its citizens have a responsibility to forge new, creative ties to the expanding nation, Kissinger Associates analyst Joshua Cooper Ramo said

Joshua Cooper Ramo of Kissinger Associates at the closing session.

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Joshua Cooper Ramo of Kissinger Associates told advisors and other guests at Schwab Impact on Thursday evening that, in order to meet the challenges of the 21st Century, they need to come to grips with the abundance of shifts happening globally – especially in China.

“The rise of China is one of the most important changes of our lifetime, and the outcome remains uncertain,” said Ramo, author of “The Age of the Unthinkable.” “For the U.S., it involves the challenge of ideas, economics and values and also the opportunity for cooperation,” he said at the closing session the conference, which was attended by some 2,100 Schwab-affiliated independent advisors and 1,900 other guests.

The Chinese, explained Ramo, see the major U.S. news from Sept. 11, 2001, and Sept, 14, 2008 (when Lehman Brothers went under) as related. “They are markers of big, powerful events,” he said. Like the Arab Spring, the Chinese work to stay abreast and to understand the connections between events that cause organizations to change and/or collapse under new and different pressures.

“How do Chinese look at this? It’s the nature of the age. Looked at from their worldview, they are looking for instability. This is one of the fundamental cultural differences between the United States and China,” Ramo (left) explained.

Ramo described “the unthinkable” as trends such as the loss of U.S. jobs and the increase in Chinese ownership of U.S. debt. But rather than seeing such developments as unpredictable, he urged the Schwab Impact audience to view them in a very broad global context.

“There’s been an explosion of world actors,” he said. This includes hedge funds, terror cells, non-governmental organizations and urban residents.

“This proliferation will not change,” added Ramo. In other words, the dramatic, often unpredictable shifts we are seeing today will only become more dramatic in the future.

(Earlier on Thursday, company founder and Chairman Charles Schwab praised economic growth in China, but said the company was not ready to do business there yet due to regulatory and other constraints.)

In this context, there will be individuals and groups on the planet who may appreciate some aspects of the United States and its culture (namely pop culture) but do not agree with all of its foreign policies and other political stances.

Such a dichotomy, Ramo says, requires more cooperation. “In a more networked world, it means there is nowhere to hide from risk,” he explained.

The tensions between change and continuity are being felt acutely in China today, which is why its leaders try to maintain strong links “to its revolutionary past,” the analyst noted. To avoid a potential military conflict with the Chinese (and others) “requires new ways of engagement and interaction,” he said.

It means that the United States has a “tremendous” responsibility to forge new, creative ties to the expanding nation. “This will define the generation. There are many reasons to find conflict, so how can we do the unthinkable?” he asked, urging America to forge new means of interaction.